Why is Cardano price down today?

1 week ago 6

Cardano (ADA) is showing weakness today, trading at $1.022, down 9% over the last 24 hours. An attempted fraud, reduced network user interaction and several onchain signals suggest that ADA could slip lower soon.

Cryptocurrencies, Dollar, SEC, Markets, Cardano, Tech Analysis, Market Analysis, Altcoin Watch

ADA price drops after Cardano Foundation’s X account hack

Investor sentiment toward Cardano has turned negative for the first time in over a month amid rising concerns about its ability to sustain the uptrend.

Against a background of this diminishing optimism, the Cardano Foundation’s X account was hacked on Dec. 8.

The hacker promoted a fraudulent ADA-related token on Solana and posted false claims about a Securities and Exchange Commission lawsuit against the ADA and the company behind it that would result in ADA transactions stopping.

Although the message looked convincing, the Cardano Foundation denied it immediately, deleted the posts and reassured the community that withdrawals for ADA would continue as normal.

Despite the swift move by the Cardano Foundation to abate the hacker’s plans to defraud its followers, the incident had a direct impact on ADA’s market sentiment, as per data from Santiment.

This also affected user interaction with the network, as evidenced by a sharp decline in the total value locked (TVL) on Cardano since the hacker’s posts appeared on X, as per data from DefiLlama.

The chart below shows that Cardano’s TVL has fallen by over 21% from an all-time high of $708.92 million on Dec. 3 to approximately $508 million at the time of publication.

The social sentiment and reduced TVL on Cardano indicate diminished user interaction, decreasing demand for ADA tokens and negatively impacting its price.

ADA price meets strong resistance

With ADA price trading at $1.0, bears appear to have established a strong supply zone around the $1.05 price range.

Data from IntoTheBlock shows that over 928,460 ADA addresses had moved roughly 102,150 ADA tokens for an average price of $1.05 between $1.03 and $1.06.

The same IOMAP chart above shows that ADA faces relatively strong resistance in its recovery path compared to the support it enjoys on the downside. This suggests that the path with the least resistance for the token is downward.

This view is shared by pseudonymous technical analyst Sssebi who says that there is not much support for ADA if it breaks below a key level at $1.05.

“If this trendline doesn’t hold we could see $ADA go to $1 or even $0.91.”

Sssebi was referring to the lower trendline of a bull flag in the four-hour timeframe, which was breached during the early Asian trading hours on Dec. 10.

In another post, Sssebi said that the “bottom could be in for ADA,” as evidenced by the large volume candle on the daily chart.

“Usually, a huge volume candle in a certain direction signals that the move is pretty much over. If we corroborate that with the fact that it went into oversold and reset the RSI + bounce from key support, it might mean that the dip is over.”

A close look at the technical setup reveals that ADA is still trading above a multi-year downtrend line, broken five weeks ago. The weekly chart below shows that $0.80 is an area of strong support for the ADA price.

The moving average convergence divergence (MACD) indicator continues its upward trajectory in the positive region, suggesting that the market conditions still favor the upside.

If the bulls are able to sustain the uptrend, they are likely to push ADA higher, with the $2.40 level representing the upside target for the buyers.

On the other hand, failure to hold above $0.80 would signal the inability of the buyers to stop the sell-off, with the next logical move being the $0.60 to $0.49 demand zone, where all the major simple moving averages sit.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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